SEC Commissioner Proposes Cautious Advancement of "Innovation Exemption" for Tokenized Securities and Raises Key Issues Including Disclosure System

Odaily News: U.S. Securities and Exchange Commission (SEC) Commissioner Hester M. Peirce stated in an article that research has been initiated on an "innovation exemption" plan for tokenized securities, which would allow limited trading and technical experimentation for certain tokenized securities. This exemption plan would be more cautious than the industry-proposed "blanket exemption." She believes it is necessary to explore whether different models of tokenized securities should be allowed for experimentation within the innovation exemption framework and to consider whether issuer consent is required for third parties to issue tokenized versions of their stocks, aiming to promote technological innovation while avoiding regulatory arbitrage and maintaining core investor protection mechanisms.

Hester M. Peirce also emphasized that regulators should not excessively intervene in private capital allocation. The SEC is currently evaluating several key issues, including: whether the existing disclosure system adequately covers the ownership structure of tokenized securities; the disclosure obligations of brokers and clearing agencies in the issuance of tokenized securities interests; the compatibility of atomic settlement with the current T+1 settlement rules; and the applicability of regulatory authority in structures with no intermediaries or new types of intermediaries.